September 28, 2011

Is Ryan's Worry about taxing job creators worthy of focus?

Paul Ryan--Republican from Wisconsin, radical right in perspectives, and chair of the House Budget Committee--is marching in lockstep with the radical right minority that is holding the majority of the US hostage in pursuit of its dream of decimating the federal government's human capital and safety net programs. In a September 18 appearance on Fox News (hat tip to OmbWatch, below), Ryan made that clear in objecting to Obama's jobs proposal by claiming that any tax increase that would hit the wealthiest small businesspeople would be a sure-fire way to undo job creation.

The other thing, in the tax side is permanent tax increases on job creators doesn't work to grow the economy. It's actually fueling the uncertainty that is hurting job growth right now. And don't forget the fact that most small businesses file taxes as individuals. So, when you are raising these top tax rates, you're raising taxes on these job creators where more than half of Americans get their jobs from in this country.

OMB Watch's Craig Jennings has some very good graphs and a sharp analysis of the lack of facts behind Ryan's pretextual 'I care about jobs' objection to taxing wealthy small business owners, at What Happens When We Tax the "Job Creators", OMBWatch.org (Sept. 22, 2011).

In essence, OMBWatch points out that

1) very few small business owners make enough to be in the top two income brackets (only about 2 percent).

Aside: Isn't it more likely that the "job engines" in our society are tose genuine entrepreneurs that are starting businesses with a few employees and making some money for themselves but not enough to be in those top income brackets?

2) For those who are in that rarified group making more than $300,000 in take-home profits, a tax increase of about $5000 more a year wouldn't be enought to change their minds on hiring decisions. They hire if they think they can expand their business and make more, and don't refuse to hire just because they make $295,000 in after-tax income in a year instead of $300,000.

3) Empirical data support the conclusion stated in point (2). There is no statistically relevant relationship between changes in top marginal income tax rates (13 of them since 1945) and following year decreases or increases in employment. Employment increases sometimes and decreases other times when rates go down; employment increases sometimes and decreases other times when rates go up. A graph of changes in the top marginal income tax rates against changes in private sector jobs between 1945 and 2010 shows no correlation--top rates go mostly down, and average monthly private sector job growth varies up and down without correlation. (See chart below, from OMBWatch 9/22/11)

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Is Ryan's Worry about taxing job creators worthy of focus?

Paul Ryan--Republican from Wisconsin, radical right in perspectives, and chair of the House Budget Committee--is marching in lockstep with the radical right minority that is holding the majority of the US hostage in pursuit of its dream of decimating the federal government's human capital and safety net programs. In a September 18 appearance on Fox News (hat tip to OmbWatch, below), Ryan made that clear in objecting to Obama's jobs proposal by claiming that any tax increase that would hit the wealthiest small businesspeople would be a sure-fire way to undo job creation.

The other thing, in the tax side is permanent tax increases on job creators doesn't work to grow the economy. It's actually fueling the uncertainty that is hurting job growth right now. And don't forget the fact that most small businesses file taxes as individuals. So, when you are raising these top tax rates, you're raising taxes on these job creators where more than half of Americans get their jobs from in this country.

OMB Watch's Craig Jennings has some very good graphs and a sharp analysis of the lack of facts behind Ryan's pretextual 'I care about jobs' objection to taxing wealthy small business owners, at What Happens When We Tax the "Job Creators", OMBWatch.org (Sept. 22, 2011).

In essence, OMBWatch points out that

1) very few small business owners make enough to be in the top two income brackets (only about 2 percent).

Aside: Isn't it more likely that the "job engines" in our society are tose genuine entrepreneurs that are starting businesses with a few employees and making some money for themselves but not enough to be in those top income brackets?

2) For those who are in that rarified group making more than $300,000 in take-home profits, a tax increase of about $5000 more a year wouldn't be enought to change their minds on hiring decisions. They hire if they think they can expand their business and make more, and don't refuse to hire just because they make $295,000 in after-tax income in a year instead of $300,000.

3) Empirical data support the conclusion stated in point (2). There is no statistically relevant relationship between changes in top marginal income tax rates (13 of them since 1945) and following year decreases or increases in employment. Employment increases sometimes and decreases other times when rates go down; employment increases sometimes and decreases other times when rates go up. A graph of changes in the top marginal income tax rates against changes in private sector jobs between 1945 and 2010 shows no correlation--top rates go mostly down, and average monthly private sector job growth varies up and down without correlation. (See chart below, from OMBWatch 9/22/11)